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The Fed Could Simply CANCEL $2 Trillion of Government Debt
Congressman Alan Grayson and former congressman Ron Paul are two of the fiercest warriors against an out-of-control Federal Reserve.
Paul has campaigned to dissolve the Fed for 35 years, and wrote an entire book called "End the Fed". Grayson has repeatedly slammed the Fed, and absolutely demolished it ... to its face. Paul and Grayson also co-sponsored a bill to audit the Federal Reserve. (Their desire to rein in the Fed is supported by numerous top economists.)
So when the two of them support a Fed-related solution to the "government shutdown" crisis, I listen.
Congressman Grayson writes:
A simple solution to the impasse is as follows: Federal Reserve Chairman Ben Bernanke should simply cancel the Treasury debt that it owns. The government can just forgive the government's debt.
This wouldn't solve the debt problem entirely. The Federal Reserve doesn't own all U.S. government debt; it owns only roughly $2 trillion of it. (Well $2,076,927,000,000.00, as of last Wednesday, but who's counting?)
NPR has a helpful graphic showing the various holders of U.S. government debt, including the Fed:
Source: NPR
Congressman Grayson continues:
Yet canceling this debt would give the government substantial room under the debt ceiling to manage its finances. It would end the debt ceiling standoff in Congress, and it would prevent a default.
The debt held on the balance sheet of the Federal Reserve can be canceled without any significant consequence, because it is a bookkeeping artifact corresponding to the money supply. In essence, the government owes this money to itself. If I owe money to myself, I can cancel that debt at will and without consequence, essentially taking it out of my left pocket and putting it in my right pocket.
Last year, the Federal Reserve declared a "profit" of roughly $91 billion, much of which came from interest payments from the U.S. Treasury. The Federal Reserve then quickly remitted nearly all of this profit right back to the U.S. Treasury.
The Federal Reserve does this every year. Reducing or eliminating this unearned "profit" actually will provide a more realistic view of federal finances.
Grayson gives credit to Paul for coming up with the idea:
I am a Democrat, and known as a progressive. But this idea was put forward a few years ago not by me, or by a member of my party, but by Republican Representative Ron Paul.
He thinks, as do I, that the Federal Reserve's dramatic expansion of its balance sheet is simply a way of financing the government by printing money. The Fed isn't really "buying" Treasury bonds, it is just letting the government finance its deficit by adding to the money supply.
Indeed, Paul introduced a bill in 2011 which would have led to the cancellation of $1.6 trillion in federal debt held by the Fed.
Grayson continues:
While canceling the Treasury debt held on the Federal Reserve balance sheet might be considered unorthodox, it is no more unorthodox than the quantitative easing that has added much of this debt to the Fed's balance sheet.
Indeed, quantitative easing - the radical program the Fed has engaged in for years, which doesn't help the economy, benefits the the super-elite and hurts the little guy, and more than offsets any savings from budget cuts in other areas - is largely performed through buying U.S. debt ... $45 billion each month.
Grayson concludes:
In any event, preventing a financial meltdown, with its attendant risks of interest rate and price spikes as well as staggering employment losses, is certainly central to the Federal Reserve's mandate of ensuring price stability, maximum employment and moderate, long-term interest rates.
Bernanke could alleviate the debt ceiling crisis simply by canceling the debt held on the Fed's balance sheet.
This may sound like a fringe idea. But the Financial Times noted in an article last year entitled “Will central banks cancel government debt?”:
It is obvious that governments are struggling to find the correct balance between controlling public debt ... and boosting the rate of economic growth. The former objective requires more budgetary tightening, while the latter requires the opposite. Is there any way around this? One radical option now being discussed is to cancel (or, in polite language, “restructure”) part of the government debt that has been acquired by the central banks as a consequence of quantitative easing (QE). After all, the government and the central bank are both firmly within the public sector, so a consolidated public sector balance sheet would net this debt out entirely.
***
Adair Turner, the chairman of the UK Financial Services Agency, and reportedly a candidate to become the next governor of the Bank of England, made a speech last week that said more unorthodox options, including “further integration of different aspects of policy”, might need to be considered in the UK. Two separate journalists (Robert Peston of the BBC and Simon Jenkins of The Guardian) said that Lord Turner’s “private view” is that some part of the Bank’s gilts holdings might be cancelled in order to boost the economy. Lord Turner distanced himself in public from this suggestion on Saturday. However, the notion will now be widely discussed.
***
Similar proposals have however been widely debated by economists in the past. This goes back at least as far as the works of Abba Lerner in the 1940s on “functional finance” and the role of fiat money. More recently, the Modern Monetary Theorists have reawakened Lerner’s ideas.
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For sure, Freedom Isnt Cheap, ordinary people who work for their money have a hard time comprehending how the banksters get to make money out of nothing, as debts! THAT HAS NOTHING TO DO WITH COMMON SENSE! The banksters' systems are deliberately designed to confuse people! Those who benefit from maintaining that public confusion profit from the established financial frauds, and become even more able to pile their bullshit higher and deeper on top of what is actually happening, which is that the international banksters were able to use the methods of organized crime to take control over the government, in order to make it legal for private banks to make endless money out of nothing, as debts, while that continued to be a crime for everyone else, and while everyone else was forced to pay taxes in that fiat money, made out of nothing.
For an entertaining way to pass the time becoming more informed about these things, here is a link to a collection my favourite free videos about the monetary system (most of which have been featured on Zero Hedge before):
http://www.marijuanaparty.ca/article.php3?id_article=445
What they are suggesting is an intermediate step to outright money printing.
Once you cancel the debt, the Fed writes down an asset and the treasury 'writes up' a forgiven liability.
So essentially the government was given money that did not have to be repaid. Sounds like printing money to me.
What happens next determines your outcome.
If the fed continues QE, but from this lower level, then it is outright printing and it should be (but won't be) clear to everyone where it is going.
If the fed stops QE, then it is real debt forgiveness. But then we get the crash anyway when rates spike.
Exactly right. Why not merge the fed. Res. and the treasury? Then the treasury can just print money as it spends it. Cut out the middle man.
They need the theater/PR component.
Must keep up appearances.
State Legislatures Must Expel the FedGov and FEMA (and its gulag camps) from their State Land NOW!...LawfullyPer Buffet, nothing will change (it makes no difference) as long as the dollar remains the world's reserve currency which the purpose of the US military power. Cancel debt, create incremental debt makes no difference. listen and learn.
Nothing's going to change until lots of people are really hurting.
The Feds are getting us there quickly!
It'll never happen. The Fed is as "federal" as fedex, it's a consortium of private banks with extra-ordinary authority - print money etc. They don't want to lose any of their ill gotten gains. We're not supposed to know which private banks constitute the fed, but it's not a federal entity, just a priveledged private one.
Of course, they could. It's called accounting fraud. To make it legal Congress could change the law, which privileges the central bank, so that nobody in the Federal Reserve had to go to jail. Of course, they could change the law too, but it would corrupt the core of the system. Therefore, either way, that will never happen.
"If one take a look at the data, can see that the share of the US government debt held by the "Federal" Reserve reached record levels in 2011, reaching 11.2% of GDP, the highest since 1940 onwards, and possibly the historically higher. In 2012, this rate was also high at 10.6% of GDP. Only once this figure reached such levels, in 1946, i.e. shortly after the end of WWII, when it reached 10.7% of GDP."
http://failedevolution.blogspot.gr/2013/10/new-deal-vs-obamacare-one-rea...
If they "cancelled" the debt, that would just create an opportunity to fund all entailment programs and secure a continuation of a destructive "death spiral".
Amazing how a BS fiat system comes up with BS solutions for the chaos they create.
Yet canceling this debt would give the government substantial room under the debt ceiling to manage its finances. It would end the debt ceiling standoff in Congress, and it would prevent a default.
The debt held on the balance sheet of the Federal Reserve can be canceled without any significant consequence, because it is a bookkeeping artifact corresponding to the money supply. In essence, the government owes this money to itself. If I owe money to myself, I can cancel that debt at will and without consequence, essentially taking it out of my left pocket and putting it in my right pocket.
What utter and complete nonsense this is. We have no hope of getting out of this jam with this kind of thinking.
When the "Fed" buys the Treasuries Notes, Bonds, and Securities, it is "certifying" a government "promise to complete a trade". It gives the government certificates (accounting entries ... money) in exchange for the government's promise to return them at some later date. The government then gives these certificates to its employees, contractors, suppliers, and dependents in exchange for services and votes. But it has promised to repay them. The only way it can repay them is through tax collections, fees, tariffs, and sale of assets like land and buildings and old broken tanks and jeeps. If it doesn't do this, it DEFAULTS.
The Fed is the (mis)Manager of our Medium of Exchange (MOE). When the government "rollsover" its debt (taking on new debt to pay off older debt), it is DEFAULTING on trading promises. The job of the MOE manager is to monitor for these DEFAULTS and to recover the certificates (money) through an equal amount of INTEREST collections. By the governing relation: INFLATION = DEFAULT - INTEREST, this would guarantee zero INFLATION. The Fed is not doing this ... INTEREST collections from the government are near zero.
If the Fed "ignores" this DEFAULT, it doesn't go away. Those certificates circulate in the marketplace and devalue all other trading promises then circulating. For 100 years the Fed has done this to the average tune of 4% INFLATION per year. But now they're doing it at warp speed. At the same time they're manipulating the price of gold making it look like the money is stronger than it really is.
When it hits the fan, people will want gold, land, food, and stuff instead of these promises to complete trades. They know there is a bad trader out there (the governments) and the traders find another way to trade (simple barter, bitcoins, etc.) or they just go to the sidelines and wait.
How silly. If we don't pay back the Fed we're just not paying back ourselves. But if we don't pay back China ... that's DEFAULT. How do they think China got those treasuries? They got them in exchange for stuff sold to the government's employees, suppliers, contractors, and dependents. In other words, they accepted "promises to complete trades" (i.e. money) ... and now the government is claiming they can just break those promises with no effect. Go figure!
Since we can't get this stopped, we need to encourage acceleration of it. The longer we have to wait for the inevitable collapse, the worse off we're going to be.
A...frigging...mazing!!!
Todd Marshall
Plantersville, TX
Cancellation of the debt the Fed holds would illustrate the stupidity of what is happening. It would simply shine a light on what is already known, that the debts will never be paid and that the printing is 100% inflationary.
The Fed holds the debt and promises to sell it into the market to soak up liquidity at a later stage - that is an obvious lie. It makes it a lot more obvious when the Fed simply prints and cancels the debt - RP and Graysons plan is just a method of revealing printing for what it is.
Of course, if any govt simply prints without issueing debt - then there is no constraint on their spending and the market will devalue and reject existing debt - I am fairly sure thats the reason why RP wanted them to do it. It would actually show the impact of printing in the bond market.
Did this miss the part the the "default" would apply only to debt held by the Fed? China, and everyone external else, would be maintained whole on their portion, and, who knows, gain some time to finally get the process in order, maybe we could even work off some principle.
Why crush the entire country to service financial protocols that are changed whenever it suits them? It the credit for debt created from thin air, explain why it cannot go back to thin air.
"It the credit for debt created from thin air, explain why it cannot go back to thin air".
Because what they bought with it wasn't thin air but somebody labor. If money grew on trees and everybody had a tree would that money have any value to you? The answer is yes and no at the same time. Yes, for as long as people thought it had value and you could exchange it for something tangible. No, if nobody saw any value in it and it wasn't an acceptable medium of exchange. If you can just create anything and say it had value them why don't you sell me your house and I will pay you with monopoly money because I say it has value. You wouldn't because you see no perceived value in my monopoly money and no means of exchanging it for something tangible. At least thats what my high school education tells me.
Limitless entitlements for everybody! No need to work or pay taxes ever again. This will also stimulate developing economies as US transitions to a 100% import economy.
We could lease out illegal aliens and pick up some cash.
I don't think Chinese would take Mexicans into their workforce, if that's what you meant
That would be cheaper than making trillion dollah coins.
No problem.
http://thumbs.dreamstime.com/x/buffalo-wooden-nickel-14361049.jpg
As long as you have the delete key under your finger just cancel the whole fucking fed.
Stupid is as stupid does.
George, and everyone else advocating this clearly failed accounting 201. They don't understand balance sheets, much less seigniorage.
The Fed is simply a large, privately owned, out of control hedge fund. Canceling that debt destroys an equivalent amount of their assets and owners equity. In short, it would break the Fed, which I'm sure was part of Dr. Paul's tongue in cheek proposal. He was trying to make the fools acknowledge reality.
The treasury could print the money, but that would swiftly result in massive inflation.
"George, and everyone else advocating this clearly failed accounting 201. They don't understand balance sheets'
I fully agree with your sentiment that "cancelling" treasury debt would make the spinning top topple. But please do not offer accounting and balance sheets as support. Accounting is a construct, invented entirely to make things balance. To make things balance any number of creations occur, say, Goodwill- never offered to the market place for any arms-length valuation, etc, etc...
And, after all, assets are but unexpired expenses anyway.
Kayman, how much is advanced control fraud covered in "accounting 201?" To understand the Federal Reserve Board better, one may need multiple PhDs in advanced control fraud, in the form knowing how organized crime is able to control the government!
The reality is always organized crime, and therefore, the real solutions are necessarily going to end up being some new form of organized crime. Orthodox economics, and the ways it teaches "accounting," is all based on having utterly bogus bullshit perspectives on the basic nature of money!
If one regards the reality of civilization as an energy system, then the heart of the control of that system is that the most labile components are the people who are the best at being dishonest, and backing their lies up with violence. That is what the FED is based upon, and almost all the idealized "solutions" are proposed by people who want to pretend that basic problem can be magically fixed.
The paradox of magical money apparently made out of nothing, is that it is really backed by murder. By and large, guys like Grayson and Paul want to pretend their way out of that, while George Washington, as the writer of this article, likes to pretend that he can consistently agree with those kinds of impossible ideals.
Tragically, the only real reset to the runaway debt insanities will be runaway death insanities. The only ways to perhaps make that better is to prevent it from getting as bad as it otherwise would, and perhaps recover better after that happens.
The bigger problem is that political economy is always inside of the human ecology, and there can be no accounting fixes which do not include that bigger context regarding who lives and who dies, which tends to be the things that people disagree about the most, and which therefore result in the outcomes of those conflicts becoming what nobody involved wanted.
One of the classic crazy things that our culture has done is attempt to separate the production from reproduction. From the perspective of an accounting system based on the flow of energy, that is insane. However, as a system which was historically controlled by deceits backed by destruction, it makes sense.
What is happening is that the financial accounting systems within political economy are bursting the seams of the the human ecology problems! That kind of accounting is deliberately banished from public debates, or only allowed in the most bizarre forms. I.e., America does TONS of death control, but only through the maximum possible deceits about doing that!
To understand the Federal Reserve Board, more than anything else one has to look at the role of the assassination of politicians who did not agree to be the puppets of the banksters. That is the central core of the real history, which is why the murder system is at the center of the money system, and therefore, runs throughout everything else.
Of course, one of the ironies of that situation is that it is almost totally useless to bother to point that out, since that will continue to be deliberately ignored by almost everyone. To make "accounting" make more sense, it would have to be based on understanding energy systems. However, to understand energy systems requires understanding militarism, and warfare, and therefore, why the monetary systems ended up developing the maximum possible frauds, such as displayed by the existence of the Federal Reserve Board.
TPTB certainly understand your point in intimate detail which is why guys like Cheney say "deficits don't matter". Thermodynamics sets the rules, physics is always king, and the most successful populations are those that are able to control the greatest share of usable energy per capita which, in biological terms, requires ultraviolence.
Even humble plants are "violent" towards one another, fighting for the light, fighting for nutrient rich soil, fighting for water. All of nature is one big contest for energy with alliances formed and broken (symbioses) and subterfuge (parasitism) commonplace. One the foundation of energy security has been (temporarily) attained, then comes the second driving factor, that of reproduction success which, as previously discussed, is more subtle (manifesting as status seeking before violence).
All of this is why the US must spend so much on military power to maintain its status and the bulk of its military might lurks around the Middle East, guarding the primary energy flow and ready to kill any other who tries to make a claim. Even more importantly, the supreme violence enabled by nuclear weapons guarantees America's position so long as a command structure remains stable enough within the US military to bring them to use.
Posturing for status (breeding success) is indeed what we advanced animals spend most of our time doing, but it is a luxury that sits upon the uglier, necessary business of killing to secure energy (hell, we do it every single time we eat food, something dies).
EXCELLENT REPLY, Mediocritas!
Particularly what you wrote in the second paragraph provides the sort of perspective that I believe another commenter, who posts under the name honestann, should consider, since the idea that there is a fundamental dichotomy between Production VERSUS Predation is belied by the fact that IT IS ALL THE SAME ENERGY THAT FLOWS THROUGH.
That latter point is extremely relevant to the problem of the "required ultraviolence" being pumped up trillions of times due to progress in science and technology, where the paradox of scientific understanding of UNITY gets applied through the most old-fashioned false fundamental dichotomies, such as using the special theory of relativity to make atomic bombs, or the understanding of the DNA code to make biological weapons, and so on and so forth!
In that overall context, I would repeat the profound philosophical point that we understand entropy backwards. The people developing the entropy equations in thermodynamics, which were then expanded through information theory, inserted an ARBITRARY minus sign into those mathematical formula, so that their measurements of power and information would give positive numbers, instead of negative numbers.
Thus, it became impossible to reconcile the view that Energy IS Spirit, because we understood the scientific Satan, entropy, backwards. Those kinds of errors in the philosophy of science are becoming extremely important in a technologically based civilization, that rapidly became trillions of times more powerful, within the life time of those still alive now!
Spot on Medio! RM it is all about easy access to energy in other peoples areas. Throughout history and our ability to use written language, it is and will remain access to other peoples stuff. That why the military ever came about. Communities had to protect their stuff from other people and wande out taking othe people stuff. The military in its simpliest terms is here to do just that. Portect our shit and take others peoples shit. We are predators and predate on each other.
Many times here we talk about riots and the SHTF and it simple will not happen until the peoples needs are no longer met. Freebies keep the population complacent. Give them some entertainment and our military will continue to cinfiscate other peoples stuff and nothing will happen. Yes lets cut the military to nothing and see what happens. Peace give me a break we are never at peace. There is a reason we spend more then many other countries combined on our MIC. Couple that with being the only country that has used nukes and most in the world fear the USA. Many speak about us losing wars all the time and yet we have not lost any of them. We sucked the coutnries as dry as we could and moved to another.
This will continue until it can't. The empire will crumble and another empire will replace it.
Because they hold so many deposits they can't easily balance the books to the tune of 2 Trillion, but they can just remove the 1+ trillion of federal reserve notes from the liabilities with the flick of a button.
It would create what is essentially a M-1 money supply (already exists any way I guess because of the outstanding united state notes).
I can never get past the "privately owned" premise when it comes to the fed. Most often we are led to believe the fed is just another branch of government. This article leads us that way, just one part of government erasing another parts debt, but that brings out the "privately owned" arguments.
Who are these private owners? This question always brings out the conspiracy theories. The Jews, the Rothschilds, the Illuminati, the Free Masons, etc.
However it ends up, these "private owners" are the ones that would be hurt by a debt jubilee of this sort, so we can base our assumptions on how powerful they are on weather a debt jubilee like this happens or doesn't happen.
Silly rabbits, debt jubilees aren't for Gentiles. Repudiate is the word you all seek...
Leviticus Chapter 25:1 sez: "The Lord spoke to Moses on Mount Sinai, saying, 2 “Speak to the people of Israel and say to them..."
Verses 8-34 lay out the details of the jubilee, then further down you'll see this:
So there you go 'Christians' who worship Israel and Zion more than Christ. You are not in the club that's eligible for a debt jubilee. Sorry bout your luck bitchez...
What you think people like Lloyd "Doing God's Work" Blankfein and Ben Shalom Bernanke are going to make exceptions for "strangers" to THEIR Laws and rules? Bwhahahaha....
Absolutely! It would leave $2T in Federal Reserve NOTES. What will the Fed pay back those notes with?
Somehow most people have gotten the idea that notes are not debt. How could that have happened?
Don't pay it back with anything, it's already legal tender to begin with.
You sound like you're one of those idiots that believe Federal Reserve Notes are NOT debt.
What do you think they meant when they printed "Will Pay to the Bearer On Demand"? What does that mean? What do you suppose they will PAY? Two five dollar FRNs for one ten?
It is debt, but that's not the point ... it's only collateralized against future US tax returns, it's all just paper and air. They can just cross off federal reserve liabilities against forgiven government debt without it affecting their own assets other than through inflation. They'll still have a balanced sheet at the end.
And it will cause massive inflation, but that wasn't the point I was disputing.
Cancel Student Debt and Up my FASFA
the Feds debt is tied to the phantom collateral they issue as bank reserves. the problem, just from the point of view of MBS is that once you cancel that debt, the mark to myth system collapses, and asset prices collapse (and the economy picks up naturally, to a hyperinflationary degree) yes you can cancel its, its phantom debt, but it is the pillar of what govenrment stands for, the faux inflation of assets is made in order to prove they are growing our economy and worthy of reelection. not only has the fed ignored the business cycle, they are ignoring structural changes, in which all economies shrink according to population, and resources.
I liked the idea of a $17 Trillion dollar coin.
Just pay it off and start over again. What could possibly go wrong?
"What could possibly go wrong"?
A lot. Put yourself in the shoes of a country forced to accept dollars watching the US just cancel their debt (same as just printing) with the stroke of a key. You would not like that. You might even say 'if they can do it so can I'.
You may say that this could be a good thing. And it could...eventually. But as the fiat system breaks down, power gets shuffled around the globe and that may not work out so well for some.
This article demonstrates just how far down the road we are. There will be no canceling of debt. They will "ease" until it all blows up.
Debt is not sacred. Businesses walk away from debts all the time, negotiate it down, allow the bank the take the worthless collateral, etc.
It would just be running the government like a business.
The collateral for the currency that the Federal Reserve creates "out of thin air" are the US taxpayers.
If the Federal Reserve cancels the $2 Trillion being talked about it would mean that the Federal Reserve can, whenever it wishes, release the US taxpayers from their collateral obligation, i.e. to have to pay interest on Treasuries.
Voila, panic selling of US Treasuries followed by hyperinflation.
'The collateral for the currency that the Federal Reserve creates "out of thin air" are the US taxpayers.'
Exactly ! A Central Bank is no substitute for a productive nation with a fully employed middle class. If this were not so, then every nation could simply hire Bernanke/Yellen clones and print themselves into prosperity.
except the taxpayers only pay about half of what is needed to run the government, and the FED can keep doing it, as long as there is demand, this is why a shutdown is really more effective than default. without the need for the FED to monetize the deficit the Fed ceases to exist, unless of course they just drop helicopter money directly on wall street. and in the event of a market crisis the Fed can and will buy stocks. so the whole game will be obvious to everyone
I like the proposal for the simple reason that it demonstrates how ridiculous it is for government entities to be holding government debt as investments. That’s particularly true when one realizes that one of those entities prints all the money out of thin air to begin with. It falls into the same category as the trillion dollar coin. If you can create it you can also cancel it. What's the real difference? Pure fiat declaration of value in spite of what anyone else or the true economy thinks.
Unfortunately, it’s still too complicated for Kim, Kanye, Miley or any of their hundred million fans to understand, and that’s the real reason it all goes on unchecked and unchallenged.
Well, but you see, it's too late. You know why we theoretically "could" cancel the debt? CUZ IT'S ALREADY CANCELLED. That's exactly what the Fed did. But keeping it on the books gives us the ability to un-cancel it. As long as it's on the books, there's a kind of a chance that we haven't really debased the currency. ALL Fed purchases are done with trillion dollar coins made of purest zinc, that have the wizard of Oz on the front and a giant all-day sucker on the back.
Cancelling the government debt is a great idea, but doing it without cancelling all private debt as well would be so hypocritical and such a double standard that any politiican that does it should be locked up for a very long time.
except that private debt is built on real collateral, savings. the Fed simply prints collateral, a very unfair advantage, and against free market economics.
There's a reason why the treasury wouldnt want to do this. The interest paid on treasuries is revenue to the Fed who remits it back to the Treasury in terms of "profit". The debt held by the Fed has no net cash flow impact to the treasury (with the exception of paying Fed salaries). It does have an impact to publicly held debt limits.
The Ron Paul proposal to repudiate the debt claim held by the Fed was to underscore the point that the Fed bond purchases were monetization of debt and are effectively funding the government. A claim which Ben Bernanke has repeatedly denied, saying their QE programs are not monetization since they're loans to the banks and in theory they could unwind the programs by selling back the bonds to the banks. The Ron Paul proposal was not a serious policy suggestion. It was an absurd policy suggestion to prove a point.
interest paid on treasuries is revenue to the Fed who remits it back to the Treasury in terms of "profit"
-a 6% dividend (see above)
The what? I'd like to actually see where the fed pays a dividend.
I now there's this mondo-fucking moron argument out there that the Fed is some sort of private entity. And it's usually loser greenbackers selling some scheme for the treasury to replace the Fed because they think it's better to just create a state bank of whatever.
It doesn't matter if the Fed pays a dividend anyway. Fact of the matter is when someone has a legalized printing press, they're letting more than just supposed shareholders dip their fingers in the pie. If you really do a audit, you'd find their probably using conduits to purchase shares in penny stocks to fund other dark budgets like the CIA or another foreign dictator's bank account.